According to a statement by the ministry of consumer affairs, food and public distribution, this reduction comes in response to rising global prices and follows a previous BCD hike in September 2024.
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“Import duty on edible oils is one of the important factors that impacted landed cost of edible oils and thereby domestic prices. By lowering the import duty on crude oils, the government aims to reduce the landed cost and retail prices of edible oils, providing relief to consumers and helping to cool overall inflation. The reduced duty will also encourage domestic refining and maintain fair compensation for farmers,” said the statement.
The reduction is also aimed at incentivising the refining of crude edible oils in India by widening the import duty differential between crude and refined oils from 8.75% to 19.25% and making crude edible oil imports easier than the imports of refined products.
The government has also asked industry stakeholders to pass on benefits to consumers immediately. “Industry stakeholders are expected to adjust the Price to Distributors (PTD) and the Maximum Retail Price (MRP) in accordance with the lower landed costs with immediate effect,” the statement said.
“A meeting with leading Edible Oil Industry Associations and industry was held under the Chairmanship of Secretary, Department of Food and Public Distribution, Government of India and advisory was issued to them to pass on the benefits from this duty reduction on to consumers,” the statement added.
The government has also asked the industry to implement these measures and send revised maximum retail prices for each brand to the government on a weekly basis, according to the statement.
The industry is of the view that the decision will protect the sector from influx of refined oils imports, causing capacity injury to the vegetable oil sector.
According to Indian Vegetable Oil Producers’ Association (IVPA), the move will not just strengthen the domestic refining capacities of Indian refiners but also ensure fair price to oilseed farmers and a fair price to the consumers.
According to IVPA data, imports of refined palm oil surged from 4.58 lakh tonnes during June–September 2024 to 8.24 lakh tonnes (representing about 30% of total palm oil imports) in the period October 2024–February 2025. Additionally, under South Asian Free Trade Area provisions of zero duty, refined oils have been flooding the Indian markets due to the huge refined oil duty advantage neighbouring countries enjoyed.
